Parent company Parmalat last week told the Italian stock exchange its wholly owned subsidiary had withdrawn a joint bid with Victoria's other milk giant, Murray Goulburn, to take over Dairy Farmers Co-op.

In a Stock and Land report last week Parmalat chief executive Enrico Biondi indicated the parent company would consider withdrawing from the Australian market if it failed in its bid to expand.

The speculation puts in doubt the future of Parmalat's two Victorian plants.

The Bannister Street plant in Bendigo employs more than 100 workers.

The Australian Competition and Consumer Commission was due to decide on the joint bid next month.

The ACC had approved a rival joint bid by National Foods and Warrnambool Cheese and Butter. National Union of Workers Victorian secretary Antony Thow said all the indications he had gained from Parmalat were that it planned to stay in Australia.

Mr Thow said the speculation did not have much substance and was likely to be the product of an overreaction by the Italian chief executive to the takeover situation.

Meanwhile, Murray Goulburn is reported to be going it alone in its bid for Dairy Farmers.

Although Murray Goulburn would not comment, its position as a co-op of about 2500 farmer shareholders would give it some advantage in gaining the 75 per cent of Dairy Farmers farmer shareholders needed to approve the takeover.

Canadian group Saputo is also in the bidding.